Friday, February 27, 2009

A Bridgeport, Connecticut federal judge awarded a teenager who had been victimized in a child pornography situation $200,000 for what the local newspaper called a, “well-heeled professional who downloaded images of her being sexually abused” (The News-Times, Tuesday, February 24, 2009, page A5; The Associated Press contributed to this story).

The defense attorney’s response to the ruling:

The first of its kind ruling drew this response from the defendant’s attorney, Jonathan Einhorn:

“It’s not a reasonable award when you consider the injuries this victim suffered related to what my client may have caused,” Einhorn said. “An award like this will probably open the floodgates.”

What this defense attorney might have meant:

“This kid is probably responsible for being in the circumstance she found herself in. She shouldn’t have been there in the first place. Where were her parents when all of this was going on?

My client is the innocent victim of readily available material on the Web. Those who produced it should be punished rather than my client, who had virtually nothing to do with it. This woman was not damaged enough to receive an award like this.”

What the defense attorney should have said:

“We abhor the abuse of any individual, for any reason. My client is already being punished by the court for his actions in this matter, adding this new burden will simply encourage others to attempt to do the same.

Tuesday, February 24, 2009

Watch Your Language: C&NC Railroad

What happened:

“Rail Cars Have Towns Singing Freight-Train Blues” blares the headline in The Wall Street Journal, Monday, February 23, 2009 (page 1, jumps to A12). It seems that, with the huge slowdown in the economy, there’s also a slowdown in the need for rail cars. Most railroads have few places to store extra cars except on sidings spread all across America, for example, the small town of New Castle, Indiana. The train tracks often run within 25 feet of homes. Now those tracks are filled with empty, seemingly abandoned rail cars and the neighbors aren’t happy.

What C&NC said:

The WSJ contacted Spencer Wendelin, an executive with C&NC Railroad, who, according to the news article, has “little sympathy for the angry residents.” “The railroad, I’ll guarantee you, was there a long time before they bought their houses,” he [Wendelin] says.

The WSJ notes that “some folks have begun to worry that some of the rail cars appear to be listing and might tip over.” To which, according to The WSJ, Mr. Wendelin dismissed the fears as “completely unfounded concerns, based on both history and physics.”

Pressed for some kind of answer about the cars, which were becoming targets for vandals and roaming children and adults, and upon being asked when the cars were to be moved, Mr. Wendelin was quoted as saying, “If you can tell me when the economy is going to turn around, then I can give you an answer to that question.”

It appears to be no more Mr. Nice Guy for the town of New Castle, Indiana.

What C&NC meant:

Up yours . . . New Castle, bird to follow. Can’t you see that we’ve got problems? We were here first. You knew what you were doing when you put your house next to the railroad track.

We’ll move these cars some place else when we can. In fact, now that you’ve griped publicly, you can bet that we’ll clear out Ponsford, Minnesota before we’ll clear out New Castle, Indiana.

What C&NC should have said:

First, let me apologize on behalf of C&NC Railroad for inconveniencing those along our rights of way, where these surplus rail cars are now being temporarily stored. Clearly, we would much rather have the cars in service, moving goods and products to markets across America.

We have established a toll free telephone number, 1-555-SO-SORRY (1-555-767-6779), for residents in the various towns where cars are currently stored to contact us regarding excessive graffiti and cars that may appear to be leaning or becoming unstable. We have several teams of inspectors who will go to those sites, assess the situation, and meet with home owners to explain what actions, if any, can be taken, or what may actually be transpiring.

This railroad has had these tracks in place for seven decades, well before any of the houses that currently lie along them were built. We recognize that we are interfering with what used to be the normal lives of our neighbors and we’ll do what we can, under the circumstances, to alleviate their concerns. The reality, though, is that, in fact, these cars must be stored somewhere and mostly in places like New Castle and other smaller towns. We know this is a difficult request to respond to, but we are asking every community along our lines to bear with us as we move through the economic dislocation we and all of America are now experiencing.

You can believe me when I tell you that our number one goal is to get those cars filled with merchandise, products, produce, livestock, or manufactured goods, and get them on the move to future customers. Perhaps, on this, we can all agree.

Friday, February 13, 2009

Giving America the Bird*

Citibank, the receiver of billions and billions, decides to spend $400 million to put its name on the new New York Mets baseball stadium. Ten times the number of seats in that stadium is equal to the number of people who lost their jobs in two days just last week. What are these corporate bozos thinking? I’ll tell you. They think it’s your fault we’re in this mess. They have absolutely no responsibility to help out. They were trained at America’s most prestigious business schools that the game is won by those who take the most and spend the most.

Bailout rule number one: If you take the money, anyway, you belong to America, and you answer to America. At the rate Citibank is making goofy decisions, a countdown clock on top executive departures has been running for some time.

Wells Fargo Bank, another receiver of tens of billions of dollars, what do they do? They decide to stage a junket to Las Vegas as a “thank you” to dozens of their hard-working high-ranking employees. Lots of great activities were planned including free helicopter rides, special parties, gifts, get-togethers, and a grand time for everyone. Once again America gets the bird. What is it about these corporate moguls that makes them think up these personal embarrassments—then carry them out only to be caught like deer in headlights? These behaviors also illustrate yet another artifact of America’s premier business education and business environment, serious integrity deficiencies and a fundamentally amoral approach to the world. For the foreseeable future, while their subsistence is in the hands of every American, Wells Fargo employees should be satisfied with a hand written thank you from their CEO, delivered personally, at work. Everybody stays home. Why on earth, in the middle of a financial disaster, would a major bank choose the oxymoronic symbolism of going to Las Vegas to gamble? Seems like they’ve done enough of that already.

Bailout rule number two: If you take the money you become a public institution, those methods and models must govern how you spend any money. If there is even the slightest hint of impropriety or inappropriateness, such actions should be promptly admitted, rescinded, and retracted, then avoided.

Service Employees International Union (SEIU), this big New York union is running aggressively negative ads against the state’s interim governor because he is, among other things, cutting health care subsidies and funding. What does SEIU want? Apparently, its hospital employees and other member workers feel that they should not have to share in the pain of New York’s financial recovery. I guess the rest of us have to pay their share. I wonder how many jobs could be preserved for the dollars the union is spending on television advertising to take on a temporary Democratic governor. Once again America gets the bird. The SEIU seems to have enough management problems and other leadership issues as well as membership divisions to keep themselves occupied without having to threaten the interim governor of the state or intimidate its legislature.

Bailout rule number three: When the public’s pain is great, those who serve in public will feel the pain first. Then everybody gets to suffer to some degree—big shots will be transformed into little shots, littler people will fall less hard but be hurt as well. Anyone who feels they are exempt betrays the American spirit we need to get through this mess.

Wall Street and the SEC: Arthur Levitt Junior, in The New York Times Sunday magazine (January 25, 2009), responded to questions. His answers illustrate the flawed, troubling relationship this regulatory agency has developed with those it is supposed to be watching.

NYT: As the chief of the SEC under Clinton, are you kicking yourself for not having caught Madoff at his game?

Levitt: I believe that our commission was the most investor-friendly in the history of America. Bernie Madoff was simply not on our screen, except as a leading market maker.

My question: If you are an investor, do you feel the SEC should be your friend or somebody with a big club and shotgun, monitoring, analyzing, and penalizing those who go out of bounds on Wall Street?

NYT: Did you happen to notice the photographs of him [Madoff], or his pose in front of a series of Roy Lichtenstein lithographs of bulls?

Levitt: You see a bull in every Wall Street office. People on the street tend to be aggressive, macho, positive.

NYT: Do you ever feel as if you should apologize?

Levitt: For what?

Bailout rule number four: It’s time to pull the bull out of Wall Street, banking, investing, and insurance regulators. Their allegiances have to be to Americans, directly. Those they regulate should fear them. Those they regulate who mess up should be punished, publicly and harshly. Regulators and the industries they watch better hope Americans stay out of the streets if troubled times persist. It wouldn’t be hard to guess where people would go if problems fail to be resolved and the bull continues.

America gets the bird again.

Who in your community is giving America the bird, right now? I’d like to know. Let’s light them up and expose them for who they are, and what they’re doing.

* The bird is the name of an internationally recognized and derogatory hand signal where the thumb and first finger, fourth, and fifth fingers are curled inward while the middle finger is extended.

Monday, February 9, 2009

On Sunday, February 8, 2009, Wells Fargo ran full-page newspaper ads across the United States headlined: “The value of team member recognition.”

This defensive gesture follows their controversial decision to reward a number of high performing employees with a trip to Las Vegas, including special events and helicopter rides. There was a firestorm of criticism, nationwide, because Wells Fargo is the recipient of bailout funds from U.S. taxpayers. There are lessons here, for every business, about dealing with self-inflicted, bad visibility.

What Wells Fargo said (in their ad):

All employers should evaluate how they spend money on employee recognition, especially if they have taken taxpayer money in the bailout.

Media stories on employee recognition programs (like ours, sending employees to Las Vegas for a few days of gambling and relaxation) were deliberately misleading and one-sided.

The media erroneously call these activities junkets, boondoggles, and waste, only for highly paid executives.

Media misrepresentations have forced Wells Fargo to cancel all its major annual recognition events for the 2009.

Our decision especially hurts those team members who worked long hours to provide good service.

Other losers are the service workers employed to carry out these programs at hotels, restaurants, and airlines.

The money comes from profits, not the bailout.

Recognition spurs competition among employees to perform better. That’s a good thing.

Since we’ve cancelled the face to face events, this ad will have to be our thank you to employees.

What Wells Fargo meant:

We don’t see any issue with our behavior, but our PR people told us it didn’t look good.

Generally, we are pretty good at these kinds of events. They’re fun, splashy and, hopefully, one ups our competitors. HR likes them.

These events showcase senior executives doing something nice, for a change, in front of employees. What’s wrong with that?

These events give employees something other than the current mess and embarrassments to talk and think about for a short while.

Maybe those anti-banking reporters and editorialists who are making such a stink will think twice next time. This will show them.

Why can’t Americans appreciate how tough this job is and what we sacrifice to serve them every day?

We just don’t get it.

What Wells Fargo should have said:

First of all, we are very sorry for what we should have recognized was a really dumb idea from the start.

When our customers are suffering, our role is to share their pain.

When our customers are paying for our lunch, we owe them special sensitivity to what we actually do, including the appearance of what we do.

Our decision called into question management’s common sense and connection to what their employees and most Americans are feeling right now, every day.

We greatly agitated and irritated our employees who are already scared and worried about their own futures.

We believe firmly in the importance of recognizing outstanding performance. It is motivating. It helps employees cope; especially now when times are so tense, stress grows every day and everyone is worried about so many things in their lives, including their jobs, homes and retirement.

We’ve done some serious soul searching and have come up with a different way to recognize our employees.

Employee Recognition

The events and splashy stuff are definitely gone, as they should have been from the start.

After holding exploratory conversations with just 3% of our employees, it was immediately and overwhelmingly obvious that employees preferred low-key localized recognition events.

Having dinners, lunches or even simple events in important local spaces was suggested. For example, rent a local elementary, middle school or high school cafeteria, or a train station lobby, local library or the common areas of other public buildings. Local college campuses would also work. These facilities can use the rental income and perhaps the visibility.

Use simpler, private, personal hand-written notes of recognition.

All employee comments are on the Website for those who care to review them.

From now on our recognition processes will have to pass four tests. This approach will prevent what happened this year from ever happening again.

Can we afford it?

Are they simple, sensible, and in proportion to what was accomplished or expected?

Is the recognition process part of an ongoing individual evaluation strategy rather than just a single big PR burst once a year?

Is the entire effort geared to truly recognize individual employees and teams rather than a black tie boost for executives? Is it largely run by employees rather than the managers?

Monday, February 2, 2009

Crisis Management: Companies Get the Unions They Deserve

The Employee Free Choice Act of 2009

According to The New York Times, 2008 saw the largest rise in union membership in a quarter century in the United States. The number, from the Bureau of Labor Statistics, was a gain of 428,000. According to The Times report, most new members were in government employment or education. If the Employee Free Choice Act (EFCA) passes, which is highly likely, there may well be another spike in union membership in America, probably starting this year.

Why does this law have such a great chance of passage? It’s because corporate tactics against unions and against this legislation have been incredibly negative, arrogant, and insulting to workers. Let’s look at the pattern:

Anti-union forces in business cite the levels of corruption in labor unions, the convictions of labor union leaders, and locals under supervision. The conviction and firing for cause of CEOs and senior business leaders, if not equal to, probably surpasses the number of union leaders who have been sentenced, are serving prison terms, or who have been otherwise prosecuted.

One business strategy is to discredit and disparage the concept of unions, their leaders, and the employees who show an interest in being represented. In other words, those who join unions feel victimized by business. So, business responds with aggressively negative intimidation, ridicule, and bullying, thus assuring further victimization and greater union loyalty.

Business owns everything (e.g., the jobs, assets, markets, resources, and even the future). Union employees only have a contract—a piece of paper or perhaps a small pamphlet—that keeps them from speaking directly to their managers and leaders, and dictates that they talk through someone who, odds are, they would rarely invite home for Sunday family dinner.

When union members attempt to correct their earlier judgment and decertify their unions, a decision only employees can make, management tends to jump in behind the scenes using the same negative, bullying, denigrating, and discrediting tactics I’ve just described. When this happens, of course, decertification fails.

Let me amend my statement: Unionized companies get the unions they deserve and seem to work very hard to keep them.

I know something about the attitude of union workers. I grew up in a labor household. My father was a shop steward for 29 years. He talked and acted like a victim of the Minneapolis public school system for most of his working adult life. I think he went to his grave regretting that he was never able to lead an illegal teachers strike against the Minneapolis school board.

The mistake management makes is to wage war instead of peace. It may be too late to defeat the Employee Free Choice Act. Business is using its same old tactics—fear, bullying, defensive threats, and whining. Now it’s time to begin preparing for whatever comes out of Congress this year and, perhaps, a modest increase in organized labor membership in the next few years. Here are the most important steps:

Learn how to wage peace with your employees, at every level, every day.

Dump the warriors, confrontation artists, and those who disdain, demean, and discredit. They are toxic to your relationships.

Get rid of friends and associates who call this approach one for “sissies”. It isn’t their war. It isn’t their peace.

Forget the employee surveys of satisfaction and other metrics. Get into the trenches and talk to everyone face-to-face. Commit yourself to getting to know as many employees as you can, their families, and the things that concern them. Every employee survey I’ve seen, even those from Fortune’s Best Companies to Work For, illustrate that most employees have two basic questions all of the time—“Does anyone know I’m here?” and “Does what I do really matter?” This is fertile ground for the organizer because the groundwork has been laid for employees to feel like victims most of the time.

Fix it now. Change it now. Question it now. Challenge it now. If business thinks its employees deserve better, business leaders had better start acting like it. If not, you better think about adding a bargaining table to your office furniture before the end of the year.

About Me

James E. Lukaszewski (loo ka SHEV skee) is an expert in preventing, managing, and reducing crisis and contention. He counsels company leaders facing serious internal and external problems. His broad-based experience ranges from media-initiated investigations to product recalls and plant closings, from criminal litigation to takeovers. He guides management through the resolution of corporate problems and bad news. The situations he helps resolve often involve conflict, controversy, community action or activist opposition, including civil and criminal litigation.
He helps executives and leaders look at problems from a variety of sensible, constructive, principled perspectives. His clients learn to take appropriate, highly focused, ethically appropriate action. He personally coaches executives in trouble, or those facing career-defining problems.
He is a prolific author (six books, hundreds of articles and monographs), lecturer, trainer, counselor, and public speaker. His newest book, Why Should the Boss Listen to You?, was published by Jossey-Bass in 2008. His name was listed in Corporate Legal Times as one of “28 Experts to Call When All Hell Breaks Loose.”